NRS 231A.200 Vested
right to credit against insurance premium tax liability: Use of credit; maximum
yearly amount of credit; amount of credit that may carry forward to subsequent
year.

NRS 231A.210 Tax
credits not to be refunded or sold; allocation of tax credits to partners,
members or shareholders of earning entity.

NRS 231A.220 Limitations
on relationship between insurer or affiliate and qualified community
development entity.

NRS 231A.230 Designation
of investment or security as eligible for tax credit by qualified community development
entity: Application requirements; duties of Department; certification of
investment or security as eligible for tax credits; transferability of
certified investment authority.

NRS 231A.240 Use
of qualified equity investments by qualified entity: Percentage required to be
invested in severely distressed census tracts; reduction in required percentage
by Director.

1. The purpose of this chapter is to
provide community development and economic stimulation, particularly to
distressed areas of this State;

2. All qualified community development
entities, including, without limitation, minority-owned community development
entities and those that have not entered into an allocation agreement with the
Community Development Financial Institutions Fund of the United States Department
of the Treasury, need to be involved in community development efforts; and

3. To maximize the benefit of this
chapter, qualified community development entities that have entered into such
allocation agreements are encouraged to work with all groups that are involved
in community development in distressed areas, including, without limitation,
minority-owned qualified community development entities, community development
entities that have not entered into such allocation agreements and other
Nevada-based entities that engage in community development.

NRS 231A.030Definitions.As
used in this chapter, unless the context otherwise requires, the words and
terms defined in NRS 231A.040 to 231A.140, inclusive, have the meanings ascribed to
them in those sections.

NRS 231A.040“Applicable percentage” defined.“Applicable
percentage” means 0 percent for the first two credit allowance dates, 12
percent for the next three credit allowance dates and 11 percent for the next
two credit allowance dates.

NRS 231A.080“Liability for insurance premium tax” defined.“Liability for insurance premium tax” means
any liability incurred by any entity under NRS
680A.330 or 680B.025 to 680B.039, inclusive, or, if the tax
liability under NRS 680A.330 or 680B.025 to 680B.039, inclusive, is eliminated or
reduced, any tax liability to the Department of Taxation that is imposed on an
insurance company or other person who had that tax liability under the laws of
this State before the elimination or reduction of that tax liability.

NRS 231A.110“Qualified active low-income community business” defined.“Qualified active low-income community
business” has the meaning ascribed to it in section 45D of the Internal Revenue
Code of 1986, 26 U.S.C. § 45D, and 26 C.F.R. § 1.45D-1, but is limited to those
businesses specified in NRS 231A.170.

NRS 231A.120“Qualified community development entity” defined.“Qualified community development entity” has
the meaning ascribed to it in section 45D of the Internal Revenue Code of 1986,
26 U.S.C. § 45D, but is limited to such an entity specified in NRS 231A.180.

(a) Except as otherwise provided in this section,
is acquired after October 1, 2013, solely in exchange for cash at the original
issuance of the equity investment;

(b) Has at least 85 percent of the cash purchase
price of the equity investment used by the issuer to make qualified low-income
community investments in qualified active low-income community businesses
located in this State by the first anniversary of the initial credit allowance
date; and

(c) Is designated by the issuer as a qualified
equity investment under this section and is certified by the Department as
complying with the limitations contained in subsection 5 of NRS 231A.230.

2. The term includes an investment that
does not meet the requirements of subsection 1 if the investment was a qualified
equity investment in the possession or control of a prior holder.

NRS 231A.160Qualifications for long-term debt security.To qualify as long-term debt security, a debt
instrument must be issued by a qualified community development entity, at par
value or a premium, with an original maturity date of at least 7 years after
the date of its issuance, with no acceleration of repayment, amortization or
prepayment features before its original maturity date. The qualified community
development entity that issues the debt instrument must not make interest
payments in the form of cash on the debt instrument during the period beginning
on the date of issuance and ending on the final credit allowance date in an
amount that exceeds the cumulative operating income, as defined by regulations
adopted under section 45D of the Internal Revenue Code of 1986, 26 U.S.C. §
45D, of the qualified community development entity for that period before
giving effect to the interest expense of the long-term debt security. This
section does not limit the holder’s ability to accelerate payments on the debt
instrument in situations in which the issuer has defaulted on covenants
designed to ensure compliance with this chapter or section 45D of the Internal
Revenue Code of 1986, 26 U.S.C. § 45D.

1. For the purpose of NRS 231A.110, a qualified active low-income community
business is limited to those businesses meeting the Small Business
Administration size eligibility standards established in 13 C.F.R. §§ 121.101
to 201, inclusive, at the time the qualified low-income community investment is
made. A business must be considered a qualified active low-income community
business for the duration of the qualified community development entity’s
investment in, or loan to, the business if the entity reasonably expects, at
the time it makes the investment or loan, that the business will continue to
satisfy the requirements for being a qualified active low-income community
business, other than the Small Business Administration size standards,
throughout the entire period of the investment or loan.

2. Except as otherwise provided in this
subsection, the businesses limited by this section do not include any business
that derives or projects to derive 15 percent or more of its annual revenue
from the rental or sale of real estate. This exclusion does not apply to a
business that is controlled by, or under common control with, another business
if the second business:

(a) Does not derive or project to derive 15
percent or more of its annual revenue from the rental or sale of real estate;
and

(b) Is the primary tenant of the real estate
leased from the first business.

3. The following businesses are not
qualified active low-income community businesses:

NRS 231A.180Qualified community development entity: Requirement for
allocation agreement; additional entities included.For
the purpose of NRS 231A.120, a qualified community
development entity is limited to an entity that has entered into, for the
current year or any prior year, an allocation agreement with the Community
Development Financial Institutions Fund of the United States Department of the
Treasury with respect to credits authorized by section 45D of the Internal
Revenue Code of 1986, 26 U.S.C. § 45D, which includes the State of Nevada
within the service area set forth in the allocation agreement. Such an entity
also includes any:

1. Affiliated qualified community
development entities of any such qualified community development entity; and

2. Partners of any such qualified
community development entity which are also qualified community development entities,
regardless of whether any such partner has entered into an allocation agreement
with the Community Development Financial Institutions Fund of the United States
Department of the Treasury with respect to credits authorized by section 45D of
the Internal Revenue Code of 1986, 26 U.S.C. § 45D

NRS 231A.200Vested right to credit against insurance premium tax liability:
Use of credit; maximum yearly amount of credit; amount of credit that may carry
forward to subsequent year.An
entity that makes a qualified equity investment earns a vested right to credit
against the entity’s liability for insurance premium tax on a premium tax
report filed pursuant to NRS 680B.030
that may be used as follows:

1. On each credit allowance date of the
qualified equity investment, the entity, or the subsequent holder of the
qualified equity investment, is entitled to use a portion of the credit during
the taxable year that includes the credit allowance date.

2. The credit amount is equal to the
applicable percentage for the credit allowance date multiplied by the purchase
price paid to the issuer of the qualified equity investment.

3. Except as otherwise provided in
subsection 4, the amount of the credit claimed by an entity must not exceed the
amount of the entity’s liability for insurance premium tax for the tax year for
which the credit is claimed.

4. If the insurance premium tax is
eliminated or reduced below the level that was in effect on the first credit
allowance date, the entity is entitled to a credit against any other taxes paid
to the Department of Taxation in an amount equal to the difference between the
amount the entity would have been able to claim against its insurance premium
tax liability had the tax not been eliminated or reduced and the amount the
entity was actually able to claim, if any.

Ê Any amount
of tax credit that the entity is prohibited from claiming in a taxable year as
a result of subsection 3 or 4 may be carried forward for use in any subsequent
taxable year.

NRS 231A.210Tax credits not to be refunded or sold; allocation of tax
credits to partners, members or shareholders of earning entity.No tax credit claimed under this chapter may
be refunded or sold on the open market. Tax credits earned by a partnership,
limited-liability company, S corporation or other similar pass-through entity
may be allocated to the partners, members or shareholders of such an entity for
their direct use in accordance with the provisions of any agreement among such
partners, members or shareholders. Such an allocation is not considered a sale
for the purpose of this chapter.

NRS 231A.220Limitations on relationship between insurer or affiliate and
qualified community development entity.

1. An insurer or an affiliate of an
insurer may not:

(a) Manage a qualified community development
entity; or

(b) Control the direction of equity investments
for a qualified community development entity.

2. The provisions of subsection 1 apply to
any entity described in subsection 1 regardless of whether the entity does
business in this State.

3. This section does not preclude an
entity described in subsection 1 from exercising legal rights or remedies,
including the interim management of a qualified community development entity,
with respect to a qualified community development entity that is in default of
any statutory or contractual obligations to the entity described in subsection
1.

4. This chapter does not limit the amount
of nonvoting equity interests in a qualified community development entity that
an entity described in subsection 1 may own.

5. For the purposes of this section:

(a) “Affiliate of an insurer” has the meaning ascribed
to the term “affiliate” in NRS 692C.030.

NRS 231A.230Designation of investment or security as eligible for tax credit
by qualified community development entity: Application requirements; duties of
Department; certification of investment or security as eligible for tax
credits; transferability of certified investment authority.

1. A qualified community development
entity that seeks to have an equity investment or long-term debt security
designated as a qualified equity investment and eligible for tax credits under
this chapter must apply to the Department for that designation. An application
submitted by a qualified community development entity must include the
following:

(a) Evidence of the applicant’s certification as
a qualified community development entity.

(b) A copy of an allocation agreement executed by
the applicant, or its controlling entity, and the Community Development
Financial Institutions Fund of the United States Department of the Treasury
which includes the State of Nevada in the service area set forth in the
allocation agreement.

(c) A certificate executed by an executive
officer of the applicant:

(1) Attesting that the allocation
agreement remains in effect and has not been revoked or cancelled by the
Community Development Financial Institutions Fund; and

(2) Setting forth the cumulative amount of
allocations awarded to the applicant by the Community Development Financial
Institutions Fund.

(d) A description of the proposed amount,
structure and purchaser of the qualified equity investment.

(e) If known at the time of application,
identifying information for any entity that will use the tax credits earned as
a result of the issuance of the qualified equity investment.

(f) Examples of the types of qualified active
low-income businesses in which the applicant, its controlling entity or the
affiliates of its controlling entity have invested under the federal New
Markets Tax Credit Program. An applicant is not required to identify the
qualified active low-income community businesses in which it will invest when
submitting an application.

(g) A nonrefundable application fee of $5,000.
This fee must be paid to the Department and is required for each application
submitted.

2. Within 30 days after receipt of a
completed application containing the information set forth in subsection 1,
including the payment of the application fee and the refundable performance
fee, the Department shall grant or deny the application in full or in part. If
the Department denies any part of the application, it shall inform the qualified
community development entity of the grounds for the denial. If the qualified
community development entity provides any additional information required by
the Department or otherwise completes its application within 15 days after the
date of the notice of denial, the application must be considered complete as of
the original date of submission. If the qualified community development entity
fails to provide the information or complete its application within the 15-day
period, the application remains denied and must be resubmitted in full with a
new date of submission.

3. If the application is complete, the
Department shall certify the proposed equity investment or long-term debt
security as a qualified equity investment that is eligible for tax credits
under this chapter, subject to the limitations contained in subsection 5. The
Department shall provide written notice of the certification to the qualified
community development entity. The notice must include the names of those
entities who will earn the credits and their respective credit amounts. If the
names of the entities that are eligible to use the credits change as the result
of a transfer of a qualified equity investment or an allocation pursuant to NRS 231A.210, the qualified community development
entity shall notify the Department of the change.

4. The Department shall certify qualified
equity investments in the order applications are received by the Department.
Applications received on the same day shall be deemed to have been received
simultaneously. For applications that are complete and received on the same
day, the Department shall certify, consistent with remaining qualified equity
investment capacity, the qualified equity investments in proportionate
percentages based upon the ratio that the amount of qualified equity investment
requested in an application bears to the total amount of qualified equity
investments requested in all applications received on the same day.

5. The Department:

(a) Shall certify $200,000,000 in qualified
equity investments;

(b) Shall not certify any single qualified equity
investment of less than $5,000,000; and

(c) Shall not certify more than a total of
$50,000,000 in qualified equity investments to any single applicant, including
all affiliates and partners of the applicant which are qualified community
development entities.

Ê If a pending
request cannot be fully certified because of these limits, the Department shall
certify the portion that may be certified unless the qualified community
development entity elects to withdraw its request rather than receive partial
certification.

6. An approved applicant may transfer all
or a portion of its certified qualified equity investment authority to its
controlling entity or any affiliate or partner of the controlling entity which
is also a qualified community development entity, if the applicant provided the
information required in the application with respect to the transferee and the
applicant notifies the Department of the transfer within 30 days after the
transfer.

7. Within 30 days after the applicant
receives notice of certification, the qualified community development entity or
any transferee pursuant to subsection 6 shall issue the qualified equity
investment and receive cash in the amount certified by the Department. The
qualified community development entity or transferee under subsection 6 must
provide the Department with evidence of the receipt of the cash investment
within 10 business days after receipt. If the qualified community development
entity or any transferee under subsection 6 does not receive the cash
investment and issue the qualified equity investment within 30 days after
receipt of the notice of certification, the certification lapses and the entity
may not issue the qualified equity investment without reapplying to the
Department for certification. Lapsed certifications revert back to the
Department and must be reissued, first, pro rata to other applicants whose
qualified equity investment allocations were reduced pursuant to subsection 4 and,
thereafter, in accordance with requirements for submitting the application.

1. A qualified community development
entity which issues qualified equity investments under this chapter shall make
qualified low-income community investments in businesses located in severely
distressed census tracts, on a combined basis with all of its affiliated
qualified community development entities that have issued qualified equity
investments under this chapter, in an amount equal to at least 30 percent of
the purchase price of all qualified equity investments issued by such entities.

2. The Director may reduce the requirement
in subsection 1 to 20 percent if the qualified community development entity
uses its commercially reasonable best efforts to satisfy the requirements of
subsection 1 and fails to do so within 9 months after its initial credit
allowance date.

3. As used in this section, “severely
distressed census tract” means a census tract that, in the immediately
preceding census, had:

(a) More than 30 percent of households with a
household income below the federally designated level signifying poverty;

(b) A median household income of less than 60
percent of the median household income in this State; or

(c) A rate of unemployment that was equal to or
greater than 150 percent of the national average.

NRS 231A.250Circumstances requiring recapture by Department of tax credits.Except as otherwise provided in NRS 231A.260, the Department shall recapture, from
the entity that claimed the credit on a return, the tax credit allowed under
this chapter if:

1. Any amount of a federal tax credit
available with respect to a qualified equity investment that is eligible for a
credit under this chapter is recaptured under section 45D of the Internal
Revenue Code of 1986, 26 U.S.C. § 45D. In such a case, the Department’s
recapture must be proportionate to the federal recapture with respect to the
qualified equity investment.

2. The issuer redeems or makes principal
repayment with respect to a qualified equity investment before the seventh
anniversary of the issuance of the qualified equity investment. In such a case,
the Department’s recapture must be proportionate to the amount of the redemption
or repayment with respect to the qualified equity investment.

3. The issuer fails to invest an amount
equal to 85 percent of the purchase price of the qualified equity investment in
qualified low-income community investments in this State within 12 months after
the issuance of the qualified equity investment and maintain at least an
85-percent level of investment in qualified low-income community investments in
the State until the last credit allowance date for the qualified equity
investment. For the purposes of this chapter, an investment shall be deemed
held by an issuer even if the investment has been sold or repaid if the issuer
reinvests an amount equal to the capital returned to or recovered by the issuer
from the original investment, exclusive of any profits realized, in another
qualified low-income community investment within 12 months after the receipt of
such capital. An issuer is not required to reinvest capital returned from
qualified low-income community investments after the earlier of:

(a) The sixth anniversary of the issuance of the
qualified equity investment, the proceeds of which were used to make the
qualified low-income community investment; or

(b) The date by which a qualified community
development entity has made qualified low-income community investments with the
proceeds of the qualified equity investment on a cumulative basis equal to at
least 150 percent of those proceeds, in which case the qualified low-income
community investment must be considered held by the issuer through the seventh
anniversary of the qualified equity investment’s issuance.

4. At any time before the final credit
allowance date of a qualified equity investment, the issuer uses the cash
proceeds of the qualified equity investment to make qualified low-income
community investments in any one qualified active low-income community
business, including affiliated qualified active low-income community
businesses, exclusive of reinvestments of capital returned or repaid with
respect to earlier investments in the qualified active low-income community
business and its affiliates, in excess of 25 percent of those cash proceeds.

NRS 231A.260Recapture: Cure period; notice requirement.Enforcement of each of the recapture
provisions set forth in NRS 231A.250 is subject to
a 6-month cure period. No recapture may occur until the qualified community
development entity has been given notice of noncompliance and afforded 6 months
after the date of the notice to cure the noncompliance.

NRS 231A.270Designation of investment or security as qualified equity
investment by qualified community development entity: Fee.

1. A qualified community development
entity that seeks to have an equity investment or long-term debt security
designated as a qualified equity investment and eligible for tax credits under
this chapter must pay a fee in the amount of 0.5 percent of the amount of the
equity investment or long-term debt security requested to be designated as a
qualified equity investment to the Department. The fee must be deposited in the
New Markets Performance Guarantee Account, which is hereby created in the State
General Fund. The entity forfeits the fee in its entirety if:

(a) The qualified community development entity
and its affiliates and partners which are also qualified community development
entities fail to issue the total amount of qualified equity investments
certified by the Department and receive cash in the total amount certified
pursuant to subsection 3 of NRS 231A.230; or

(b) The qualified community development entity or
any affiliate or partner which is also a qualified community development entity
that issues a qualified equity investment certified under this chapter fails to
meet the investment requirement specified in subsection 3 of NRS 231A.250 by the second credit allowance date of
the qualified equity investment. Forfeiture of the fee under this paragraph is
subject to the 6-month cure period established pursuant to NRS 231A.260.

2. The fee required pursuant to subsection
1 must be paid to the Department and held in the New Markets Performance
Guarantee Account until such time as compliance with the provisions of
subsection 1 has been established. The qualified community development entity
may request a refund of the fee from the Department no sooner than 30 days
after having met all the requirements of subsection 1. The Department shall
refund the fee within 30 days after such a request or being given notice of
noncompliance.

1. The Department shall issue letter
rulings regarding the tax credit program authorized under this chapter, subject
to the terms and conditions set forth in this section.

2. The Department shall respond to a
request for a letter ruling within 60 days after receipt of the request. The
applicant may provide a draft letter ruling for the Department’s consideration.
The applicant may withdraw the request for a letter ruling, in writing, before
the issuance of the letter ruling. The Department may refuse to issue a letter
ruling for good cause, but must list the specific reasons for refusing to issue
the letter ruling. Good cause includes, but is not limited to:

(a) The applicant requests the Department to
determine whether a statute is constitutional or a regulation is lawful;

(b) The request involves a hypothetical situation
or alternative plans;

(c) The facts or issues presented in the request
are unclear, overbroad, insufficient or otherwise inappropriate as a basis upon
which to issue a letter ruling; and

(d) The issue is currently
being considered in a rulemaking procedure, contested case, or other agency or
judicial proceeding that may definitively resolve the issue.

3. Letter rulings bind the Department and
the Department’s agents and their successors until such time as the entity or
its shareholders, members or partners, as applicable, claim all the covered tax
credits on a tax return or report, subject to the terms and conditions set
forth in any regulations adopted by the Director pursuant to NRS 231A.150. A letter ruling applies only to the
applicant.

4. In rendering letter rulings and making
other determinations under this chapter, to the extent applicable, the
Department of Business and Industry and the Department of Taxation shall look
for guidance to section 45D of the Internal Revenue Code of 1986, 26 U.S.C. §
45D, and the rules and regulations issued thereunder.

5. For the purposes of this section,
“letter ruling” means a written interpretation of law to a specific set of
facts provided by the applicant requesting the ruling.

NRS 231A.300Decertification of qualified equity investment: Circumstances;
limitations on distribution and payment on securities by qualified community
development entity; notice requirements.

1. Once certified under subsection 3 of NRS 231A.230, a qualified equity investment may not
be decertified unless all the requirements of subsection 2 have been met. Until
all qualified equity investments issued by a qualified community development
entity are decertified under this section, the qualified community development
entity is not entitled to distribute to its equity holders or make cash
payments on long-term debt securities that have been designated as qualified
equity investments in an amount that exceeds the sum of:

(a) The cumulative operating income, as defined
by regulations adopted under section 45D of the Internal Revenue Code of 1986,
26 U.S.C. § 45D, earned by the qualified community development entity since
issuance of the qualified equity investment, before giving effect to any
interest expense from the long-term debt securities designated as qualified
equity investments; and

(b) Fifty percent of the purchase price of the
qualified equity investments issued by the qualified community development
entity.

2. To be decertified, a qualified equity
investment must:

(a) Be beyond its seventh credit allowance date;

(b) Have been in compliance with NRS 231A.250 through its seventh credit allowance
date, including coming into compliance during any cure period allowed pursuant
to NRS 231A.260; and

(c) Have had its proceeds invested in qualified
active low-income community investments such that the total qualified active
low-income community investments made, cumulatively including reinvestments,
exceeds 150 percent of its qualified equity investment.

3. A qualified community development
entity that seeks to have a qualified equity investment decertified pursuant to
this section must send notice to the Department of its request for
decertification together with evidence supporting the request. The provisions
of paragraph (b) of subsection 2 shall be deemed to be met if no recapture
action has been commenced by the Department as of the seventh credit allowance
date. The Department shall respond to such a request within 30 days after
receiving the request. Such a request must not be unreasonably denied. If the
request is denied for any reason, the burden of proof is on the Department in
any subsequent administrative or legal proceeding.

NRS 231A.310Qualified community development entity not entitled to pay to
affiliates fees in connection with qualified investments before
decertification.A qualified
community development entity is not entitled to pay to any affiliate of the
qualified community development entity any fees in connection with any activity
under this chapter before decertification pursuant to NRS
231A.300 of all qualified equity investments issued by the qualified
community development entity. This section does not prohibit a qualified
community development entity from allocating or distributing income earned by
it to such affiliates or paying reasonable interest on amounts loaned to the
qualified community development entity by those affiliates.

NRS 231A.320Duties of Director: Annual review of qualified community
development entity; report to Legislature.

1. The Director shall conduct an annual
review of each qualified community development entity that has been granted an
application for a qualified equity investment pursuant to NRS 231A.230 to ensure that:

(a) The qualified community development entity
remains in compliance with the provisions of this chapter and any regulations
adopted pursuant thereto; and

2. On June 30 of each even-numbered year,
the Director shall submit a report to the Director of the Legislative Counsel
Bureau for transmittal to the Legislature. The report must include, for each
qualified equity investment certified pursuant to NRS
231A.230:

(a) Information on the impact of the qualified
equity investment on the economy of this State, including, without limitation,
the number of jobs created by the qualified equity investment; and

(b) Proof that the qualified community
development entity responsible for the qualified equity investment is in
compliance with the provisions of this chapter and any regulations adopted
pursuant thereto.